In this article we will take a look at the 10 best dividend stocks to buy according to billionaire Howard Marks. You can skip our detailed analysis of Howard Marks’ history, investment philosophy, and hedge fund performance, and go directly to the 5 Best Dividend Stocks to Buy According to Billionaire Howard Marks.
Born in New York, Billionaire Howard Marks started with his career at Citibank and, in 1985, became a part of TCW Group as its asset manager. Marks’ credibility comes from his exceptionally detailed investment memos that include this thoughts on index investing in cryptocurrency. Howard Marks, in 1995, along with a few other individuals at TCW, started Oaktree Capital Management. Los Angeles-based Oaktree is an investment firm specializing in convertible securities, corporate debt, distressed debt, and alternative investments. Oaktree Capital Management manages around $78 billion worth of investment capital for endowments, foundations, and pension funds. At the nucleus of its focus are the companies mostly shelved in the category of ‘contrarian investments.’ Oaktree also invests in listed equities, control investments, and real estate. This hedge fund became public in 2012 through IPO.
In this article we are going to take a look at some of the notable dividend stocks in Howards Mark’s portfolio.
The coronavirus crisis has highlighted the importance of dividend investing. Receiving steady dividends during the times of joblessness, financial volatility and recession makes a big difference. That’s why companies like International Business Machines Corporation (NYSE: IBM), Broadcom Inc. (NASDAQ: AVGO) and Intel Corporation (NASDAQ: INTC) are seeing positive reception from investors. The common factor in these stocks is that they not only pay steady dividends, they are also investing in long-term growth projects that will elevate their stock prices.
International Business Machines Corporation (NYSE: IBM), for example, has recently launched its first-ever 2 nanometer (nm) nanosheet technology to enhance energy efficiency and better chip performance. Additionally, International Business Machines Corporation (NYSE: IBM) has collaborated with HCL Technologies to streamline and unify its threat management system for clients through the SOC platform. IBM’s Cloud and AI technologies are making headlines after the company unveiled Watson Orchestrate, an interactive AI capability to increase productivity of workers in sales, HR, operations and other departments without needing IT skills.
Howard Marks of Oaktree Capital
Broadcom Inc. (NASDAQ: AVGO) is another notable dividend stock that has hiked its payout consistently for the last several years. The company recently announced that it is making available 64G Fibre Channel HBA, the first one in the world. With this, the firm will become the first-ever to provide a whole bunch of products of 64G data path. Additionally, Broadcom will also deliver its enterprise operations software and security software suite on Google cloud. Interestingly, earlier this year, Broadcom Inc. (NASDAQ: AVGO) announced that its BCM4389 chip enables the first-ever Wi-Fi 6E phone, Samsung Galaxy S21 Ultra.
Intel Corporation (NASDAQ: INTC), which announced a 5.3% dividend increase earlier this year, is one of the best dividend stocks to buy for those who are looking for stocks with steady dividend hikes and long-term growth potential. Intel recently launched Tiger Lake-H, the 11th-gen Intel Core mobile processor. Additionally, Intel Corporation (NASDAQ: INTC) also announced plans to invest $3.5 billion in New Mexico. The investment will create 3,500 jobs.
Dividend investing is more important during times of financial volatility, which caused even the smart money to waver. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Best Dividend Stocks to Buy Based on Howard Marks’ Portfolio
Let’s start our list of 10 best dividend stocks to buy according to billionaire Howard Marks:
10. Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM)
Marks’ Stake Value: $43,501,000
Percentage Howard Marks’ 13F Portfolio: 0.74%
Dividend Yield: 1.58%
No. of Hedge Fund Holders: 72
Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is known for selling and manufacturing semiconductors and circuits. It also offers engineering, account management, and customer services. The company recently announced that its April 2021 net revenue on a consolidated basis came in at NT$111.32 billion, depicting a 13.8% decline from the previous month. This also shows a rise of 16% from the previous year. January revenue until April 2021 came in at NT$473.73 billion, reflecting a 16.5% increase when compared with the previous year. The stock ranks 10th in the list of best dividend stocks to buy now based on Howard Marks’ portfolio.
Like International Business Machines Corporation (NYSE: IBM), Broadcom Inc. (NASDAQ: AVGO) and Intel Corporation (NASDAQ: INTC), Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is one of the best tech dividend stocks.
Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) recently announced its plan of adding five additional chipmaking fabs to be a part of a $12B factory in Arizona. This expansion is a result of U.S. government’s request. It is expected that the volume production of this wafer fab would lead to an output of 20,000 monthly wafers.
9. Mgic Investment Corporation (NYSE: MTG)
Marks’ Stake Value: $38,817,000
Percentage Howard Marks’ 13F Portfolio: 0.66%
Dividend Yield: 1.71%
No. of Hedge Fund Holders: 27
Mgic investment Corporation (NYSE: MTG) is known for providing private mortgage insurance through subsidiaries. There company mainly operates in Guam, Puerto Rico, and the U.S.
MTG has recently reported its financial and operating results for Q1 2021. The company’s net income came in at $0.43 per diluted share or $150.0 million, as against $0.42 per diluted share or $149.8 million in Q1 2020. Its adjusted net operating income was reported at $0.42 per diluted share or $148.0 million in Q1 2021, relative to $0.42 per diluted share or $147.5 million in Q1 2020.
Chuck Royce of Royce & Associates holds 1.10 million shares of Mgic investment.
Mgic investment Corporation (NYSE: MTG) board declared $0.06 per share of a quarterly cash dividend. The company has a “buy” rating, and its average target price is $13.67. It ranks 9th in the list of best dividend stocks to buy now based on Howard Marks’ portfolio.
8. Oasis Petroleum Inc. (NASDAQ: OAS)
Marks’ Stake Value: $10,596,000
Percentage Howard Marks’ 13F Portfolio: 0.18%
Dividend Yield: 2%
No. of Hedge Fund Holders: 14
Oasis Petroleum Inc. (NASDAQ: OAS) is an independent production and exploration company inclined to develop and acquire natural gas resources and unconventional oil resources in the U.S. In May 2021, the company agreed to acquire Williston Basin assets belonging to Diamondback Energy, Inc. (NASDAQ: FANG). The transaction is valued at $745 million. The new assets are inclusive of approximate production of 27K boe/day in Q1 based on two-stream. Additionally, OAS also gets 95K net acres.
Like International Business Machines Corporation (NYSE: IBM), Broadcom Inc. (NASDAQ: AVGO) and Intel Corporation (NASDAQ: INTC), OAS is one of the best dividend stocks to buy now.
7. Americold Realty Trust (NYSE: COLD)
Marks’ Stake Value: $43,9435,000
Percentage Howard Marks’ 13F Portfolio: 7.56%
Dividend Yield: 2.31%
No. of Hedge Fund Holders: 29
This publicly traded REIT, which largely focuses on temperature-controlled warehouses, is on list of 10 best dividend stocks to buy based on Howards Mark’s portfolio. Americold Realty Trust (NYSE: COLD) recently announced its Q1 2021 financial results. The company’s total revenue increased to $634.8 million, depicting a 31.1% jump from the previous year. Its Board of Trustees also recently declared a $0.22 per share dividend for Q1 2021. The dividend shall be paid to shareholders of COLD common shares.
The new dividend announcement reflects a 4.8% increase and an annual dividend rate of $0.88. Previously, the company had paid a $0.21 per share dividend.
6. America Movil S.A.B. de C.V. (NYSE: AMX)
Marks’ Stake Value: $40,398,000
Percentage Howard Marks’ 13F Portfolio: 0.69%
Dividend Yield: 2.38%
No. of Hedge Fund Holders: 16
America Movil S.A.B. de C.V. (NYSE: AMX) is the telecommunication service provider in Latin America and abroad. The company announced its financial results recently. America Movil added new 6.0 million wireless subscribers. This is a 1/3rd increase from the previous year. Primary subscribers come from Colombia, Mexico, and Brazil.
Q1 2021 revenue of America Movil S.A.B. de C.V. (NYSE: AMX) came in at 248 billion pesos, a decline of 1.1% on a YoY basis. Meanwhile, there has been a 1.7% increase in mobile service revenues. Revenue in the fixed-line service rose for the first time in previous eight quarters.
Additionally, the company’s board announced spin off-plan from América Móvil in Latin America along with other countries where it operates. The operation is said to increase infrastructure value since the new entities shall work independently from America Movil S.A.B. de C.V. (NYSE: AMX). Overall rating of the company is “Neutral,” and its average target price is $19. Like International Business Machines Corporation (NYSE: IBM), Broadcom Inc. (NASDAQ: AVGO) and Intel Corporation (NASDAQ: INTC), AMX is one of the best dividend stocks to buy now.
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Disclosure: None. 10 Best Dividend Stocks to Buy According to Billionaire Howard Marks is originally published on Insider Monkey.
